Competition law – Requirement of notice when directing ‘further’ investigation

Sep 16, 2014

16 September, 2014

Notice before directing further investigation under
Section 26(7) of the Competition Act is not required to be given to the person
against whom information was provided. Delhi High Court in this case decided on
3-9-2014 was of the view that reasons given by Supreme Court in the case of Steel
Authority of India for holding that no notice/hearing is required to be
given to the person informed against, before forming a prima facie
opinion and directing investigation under Section 26(1), would also apply to
the stage under Section 26(7) wherein Commission directs for further
investigation after a negative report of the DG.

Reliance in this regard was also placed on various
precedent decisions of the Apex Court holding that there is no right of the
accused to be heard, before the Magistrate or the Sessions Judge directs
further investigation, even where the investigation carried out has found him
to be not guilty. It was also noticed that function of CCI under said section
is not adjudicatory and that this stage is also an initial stage.

The court further upheld the single judge’s
decision that legislature’s use of the words ‘parties concerned’ in Section
26(5) cannot be meant to cover person informed against. Absence of any such
intention of the legislature, while amending Section 26 by Competition
(Amendment) Bill, 2007 in 2009, was also noticed by the court in this regard
while it laid down procedure to be followed by CCI after Section 26(1) stage
i.e. when it directs investigation.